Pages

Monday, 15 June 2015

A few macro and related stories today...

A few macro and related stories today...

Greece – best line have heard so far: ‘The 11th
hour ended in 45 minutes’.

Greek negotiators walked out of the
European Commission’s Brussels headquarters only 45 minutes after the talks
began. According to an EU official who has seen the much-anticipated Athens
counterproposal, long sought by negotiators representing Greece’s creditors, it
fell well short of expectations and was not adequate for a compromise deal' (FT)

Greece #2 – but what are the differences really
about? This IMF blog link has all the answers:

'Proposed to lower the medium term primary budget surplus target from 4.5%
of GDP to 3.5%, and give Greece two more years to achieve that target… the
Greek government has to offer truly credible measures… Why insist on pensions?
Pensions and wages account for about 75% of primary spending… We are open to
alternative ways for designing both the VAT and the pension reforms… European
creditors would have to agree to significant additional financing, and to debt
relief sufficient to maintain debt sustainability’

Greece #3 - Greek FM Varoufakis tells BILD he rules
out Grexit. says debt restructuring is only way possible for Greece. Would agree with the latter point...but as noted above there has to be a meeting in the middle...

UK pensions: and you thought that only Greece had a pension issue. As this report in The Times notes:

'The bill for private pensions is now
greater than Britain’s entire annual output, according to a report. The future cost of paying pensions promised to 11 million
people in defined benefit schemes has rocketed in the space of a year from £1.7
trillion to £2.1 trillion, compared with a national annual output of £1.8
trillion'

U.S. junk-bond defaults rose to the highest level
since October 2009 as depressed prices plague energy, metal and mining issuers
that represent the largest contingent of debt from the riskiest companies. Got to keep watching bonds...

Asia/China thoughts –

$CNY 5.7trl to be locked up due to 25 IPO’s this week while
the CSRC limits brokerages' margin trading volume

According to a report from Bloomberg the value of Chinese
stocks rose above $10 trillion for the first time last week, adding an
astonishing $6.7 trillion to the market capitalisation of Chinese firms
compared to levels of a year earlier. To put the gain into perspective, based
on calculations by Bloomberg, the 12-month increase is more than the entire
market capitalisation of Japanese firms which currently sits around $5
trillion.